In the past 10 years, the benchmark Nifty and the broader Nifty 500 have closed higher in seven of the past 10 occasions during the month. Yet, analysts said market action in the coming weeks could be constrained, with indices likely stuck in a narrow range in the absence of fresh catalysts.
“As we step into October, the Nifty is expected to remain in the 24,300-25,400 range,” said Sriram Velayudhan, senior vice president, IIFL Capital Services. “Factors like lack of clarity on tariff resolution, FII selling and a busy primary market pipeline could also keep indices range-bound.” This month, large IPOs such as Tata Capital, LG and WeWork are scheduled to hit the market.
Data from Motilal Oswal Financial Services showed that the Nifty and Nifty 500 in October have delivered average gains of 0.6% and 0.7%, respectively, over the past decade.
In September, the Nifty and Nifty 500 gained 0.8% and 1.2% respectively.
Agencies“A recovery from current levels looks likely, given the recent correction, potential GST-led momentum, and festive-driven consumption,” said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Financial Services. Taparia noted that immediate support for the Nifty is at 24,400, with potential to move towards 25,250 in the near term.In contrast, US benchmarks have shown mixed seasonality in October. The S&P 500, Dow Jones and Nasdaq 100 have gained in only five of the past ten years, though average returns for all three indices have been positive, between 1.3% and 2%.”While US indices witness mixed seasonality in October, such patterns have historically had limited spillover into Indian markets,” said Taparia.
Velayudhan added that the earnings season will also be closely watched. “In the event of progress on tariff resolution by the end of the month, a recovery rally cannot be ruled out,” he said.
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